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Financial sector thrives on Malawi Stock Exchange

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John Kamanga

Financial market players listed on the Malawi Stock Exchange (MSE) have shown resilience to economic impacts of the Covid pandemic on businesses witnessed by above-average profit-declarations in their trading statements for 2020.

Players in the hospitality industry have been worst hit while counters in property management and telecommunications have displayed mixed performances in the year.

A corporate news report released by MSE has shown that FMB Capital Holdings plc will post a 200 percent profit increase while NBS Bank plc will record 25 percent profit and National Bank of Malawi plc expects a profit increase of more than 20 percent.

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Standard Bank expects a 45 percent increase in profits while FDH Bank has declared a K3 billion dividend payment,

However, despite Airtel Malawi plc expecting a 40 percent increase in profit, its competitor TNM plc expects a 25 percent subdued profit for the year.

In the hospitality sector, Blantyre Hostels plc expects a 200 percent deep in losses while Sunbird Tourism plc expects a 150 percent loss.

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Research Manager at Capital Alliance Limited Bond Mtembezeka said banks in the country stand the test of economic calamities.

He said at the pick of the pandemic in 2020 most banks relied on digital and remote banking channels, which enhanced service provision and reduced costs of operations.

“Malawian banks are generally resilient firstly because of stringent standards set by Reserve Bank of Malawi; that is, adequate capital requirements and constant off-site and on-site monitoring,” Mtembezeka said.

Speaking in an earlier interview, MSE Chief Executive Officer John Kamanga attributed the mixed performance to the Covid pandemic, political instability and listing of new companies on the market.

“Some of the counters were heavily affected especially the hospitality industry and on some counters we saw the price going down; so, as the result of that, investors increased their sales but at a lower price but we also saw some counters thriving such as those in the banking industry and the telecommunications industry,” Kamanga said.

Chief Executive Officer of Stockbrokers Malawi Limited Noel Kadzakumanja said the development may not affect investment decisions on the investing public.

“It is not straight forward whether that time to buy is now or not depends on many other factors. For example, if a listed company’s business looks promising and its share is seemingly underpriced or fairly priced, there is a good reason to buy,” Kadzakumanja said.

Despite the Covid pandemic, which has slowed down businesses in many sectors, the stock market has been resilient, witnessed by positive return on investments registered on the market in the previous month.

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